Source: www.gulf-daily-news.com
DUBAI: Weak land sales and deliveries will weigh on Abu Dhabi developers’ second-quarter earnings, while handovers are expected to boost figures for Dubai’s Emaar , builder of Burj Khalifa, the world’s tallest tower.
“Overall, we don’t see much on the upside, with the exception of Emaar Properties,” said Jad Abbas, equity analyst at EFG-Hermes in Dubai.
“We are looking at a good quarter for Emaar and earnings are expected to be driven by deliveries of properties from Burj Khalifa,” he added.
The Egyptian bank is forecasting a net profit of 1.9 billion UAE dirhams ($517.4 million) for the quarter for the Arab world’s largest listed developer, compared with a loss of 1.29bn dirhams in the same period last year.
Emaar said in April it would focus on expanding in the Middle East, North Africa and South Asia in 2010, after its first-quarter profit more than tripled, boosted by revenues from its hospitality and retail businesses.
EFG expects Dubai’s second-largest developer by market capitalisation, Deyaar, to suffer the biggest slump in profit among UAE property and construction firms due to fewer deliveries of homes in the quarter than last year, Abbas said.
The bank is expecting Deyaar to report a net profit of 19m dirhams, down 75 per cent on a year earlier. Deyaar reported a first-quarter loss of 100m dirhams on the back of provisions.
Developer Union Properties will likely record a profit of 33m dirhams, reversing a loss in the same period last year, mainly on the completion of handovers at its Motor City project, he said.
Dubai construction firms are seen suffering this quarter, with Drake and Scull International’s second-quarter net profit seen falling 48pc to 45m dirhams, according to Securities and Investment Company (SICO) in Bahrain, while EFG sees Arabtec’s net profit easing 26pc to 136m dirhams.
Dubai’s property crash sent house prices falling by some 60pc from their peaks and led to more construction firms flocking from the emirate to win work in Abu Dhabi which has hit margins there.
Abu Dhabi’s two largest developers by market capitalisation could slip into the red in the second quarter, according to HC Securities, which forecasts a loss of 203m dirhams for Aldar Properties and 6m dirhams for Sorouh Real Estate.
“For Aldar and Sorouh we don’t expect any major deliveries in the second quarter,” said Majed Azzam, real estate analyst at HC Securities.
